• Recent years have brought significant changes in the dynamics of the consumer goods market, and the balance of power between private labels and established brands has been influenced by factors such as inflation, legislative changes, and the adaptation of purchasing behavior.
If in the previous period private labels experienced a spectacular rise due to the price advantage, currently there is a moderation in the growth rate and a diversification of the factors that determine consumer preferences.
The figures for the end of 2024 show a return to an upward trend in sales volumes, with a value advance of 8% compared to 2023, while the volume growth was 4%. Beyond inflation and purchasing power, other factors such as extreme weather conditions, new tax regulations and changes in consumer behavior have significantly influenced the market dynamics. A notable example of this is the impact of the early and hot summer on ice cream sales, which increased by double digits, while the increased tax on products with a high sugar content slowed the growth of sweets, chocolate and carbonated drinks volumes.
Consumers and private brands
If in the past, purchasing private labels was a choice dictated strictly by price, today this product category benefits from constant interest and improved perception among consumers. Studies conducted by NielsenIQ shows that four out of ten buyers intend to maintain the same level of product purchases (private-label, and 44% said they would buy more from this category.
A similar trend is observed in rural areas, where 60% of consumers remained loyal to the quantities they previously purchased, while 19% chose to buy more private label products, and an identical percentage reduced consumption. The main reasons for this choice include the quality-price ratio, the more affordable price compared to established brands, and the perception that these products have acquired a higher quality.
From a distribution perspective, discounters dominate the private label segment, with a value share of 56,3% and a volume share of 59,1%. They are joined by minimarkets and supermarkets, with minor differences between them, while hypermarkets have a share of 13,6% in value and 18,3% in volume.
Favorite product categories
In terms of product categories, private labels are best represented in the food sector, with a share of 27%, followed by non-food products (15,7%) and non-alcoholic beverages (6,8%). The most popular categories are packaged meat, cheese and dairy, while the categories with the lowest share are chocolate, biscuits and home care products.
Romania in a global context
With a market share of 18,5% for private labels, Romania remains below the global average of 22,7% and well behind the European average of 36,8%. The gap between Western Europe (39,6%) and Eastern Europe (19,7%) is significant, indicating considerable growth potential for the domestic market for products (private-label.
In the future, the dynamics of this sector will be influenced by macroeconomic factors, price developments and consumer behavioral changes, but trends show that private labels will continue to play an increasingly important role in Romanians' purchasing preferences.
Article written by Gabriela Dan, Editor-in-Chief Arta Albă
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